The SEC has initiated an enforcement proceeding against Platinum Management (NY) LLC, Platinum Credit Management, L.P. and seven individuals, alleging that they improperly inflated the value of illiquid fund assets, made material misrepresentations to investors to hide the liquidity crisis faced by the firm’s flagship fund and orchestrated a scheme to defraud third-party bondholders of one of the fund’s portfolio companies. In a parallel investigation, the DOJ has brought an eight-count indictment against seven individual defendants for securities fraud, investment adviser fraud and conspiracy. The SEC complaint asserts 11 counts of securities and investment adviser fraud against the defendants. This article discusses the alleged fraudulent conduct, along with the specific SEC and DOJ charges. For additional coverage of the SEC’s recent attention to valuation of illiquid assets, see “SEC Continues to Focus on Insider Trading and Fund Valuation” (Jun. 30, 2016); and “SEC Division Heads Enumerate Enforcement Priorities, Including Conflicts of Interest, Valuation, Performance Advertising and CCO Liability (Part Two of Two)” (May 5, 2016). For more on regulatory concerns over liquidity, see “FSOC Report Focuses on Liquidity, Leverage and Other Risks Facing Hedge Fund and Asset Managers” (Apr. 28, 2016).